CAISO CEO Steve Berberich will retire Sept. 29 after nine years as head of California’s grid operator. His replacement, Elliot Mainzer, who served for the past seven years as head of the Bonneville Power Administration, will take over the next day.

At a time of great change for CAISO, the two CEOs answered stakeholder questions in a roundtable discussion Tuesday hosted by the Western Energy Imbalance Market’s Regional Issues Forum. John Prescott, chair of the EIM’s Governing Body, moderated the discussion.

Many of the questions dealt with the challenges CAISO faces as it struggles with capacity shortfalls, the switch to carbon-free energy and its expanding role in Western energy markets.

The most candid answer of the hourlong meeting came from Berberich, when Prescott asked him about the rolling blackouts of Aug. 14-15 and the energy emergencies CAISO declared over Labor Day weekend.

Massive heat waves across the West and a scarcity of resources during evening peak demand times pushed CAISO too close to the edge, Berberich said. ISO staff had warned that capacity shortfalls could occur under just such circumstances, and now the state must move quickly to head off similar shortfalls next summer, he said.

“In a nutshell, resource adequacy needs to be redesigned, and I don’t mean in a two-year regulatory, litigated process,” Berberich said. “It better happen pretty damn fast, or we’re going to have these same issues next summer, and I don’t want Elliot to have to deal with the same crap I’ve had to deal with over the last 30 days. So, if there’s any legacy I could [leave], it’s that this has to happen, and it has to happen soon.”

Berberich previously faulted the California Public Utilities Commission, which oversees procurement, for failing to heed CAISO’s warnings. (See CAISO Blames Blackouts on Inadequate Resources, CPUC.)

CAISO, the CPUC and state Energy Commission are compiling a report on the causes of the August blackouts, which will probably be released after he retires, Berberich said. Some, including the California Community Choice Association, have called for an independent audit of that report. (See CalCCA Seeks ‘Objective’ Review of Blackout Report.)

It appears, Berberich said, that California generators were exporting energy in the day-ahead market even as the state struggled to meet demand in the real-time market, but the exact nature of the exports and their effects must still be determined, he said. Another problem may have been that some load-serving entities weren’t scheduling all their demand in the day-ahead market, he said.

“There are a lot of moving parts on this thing,” Berberich said.

The biggest problem, however, was clear, he said. It was the “head of the duck” in California’s distinctive “duck curve” demand trend. The duck’s head is also called the net peak: the hours after sun goes down and solar power rolls off the system but demand remains high.

“From a resource adequacy perspective, you have to cover all of the hours, and the way renewables work, you have to rethink these old ways of doing things,” Berberich said.

“It’s clear to everyone the sun doesn’t work in the evening and the wind doesn’t always blow, particularly when it’s hot with high-pressure systems sitting over California and the West,” he said. “So now you’re left with what? Right now, you have to use the gas fleet and imported power. And the gas fleet has been retiring here in California. And I’ve known this for some time, and I’ve told people … for some time, [that] there are going to be limits on imports when you have these heavy load periods throughout the region.

“And that’s exactly what transpired,” Berberich said. “The net peak or the head of the duck has to be provided for just like the 4 and 4:30 peak has to be provided for, and this is not news. We’ve been talking about this for a long time. We’ve said this publicly. We’ve had these filings. The resource adequacy program in California is not now matched up with the realities of working through a renewables-based system.”

The approximately 1,500 MW of battery storage that’s scheduled to come online by next summer will help but may not be the panacea some imagine, he said.

“Storage is going to play an important role, but you also have to think through how that storage is going to be charged, how it’s going to be discharged and how the economics will work,” Berberich said.

CAISO is seeking to deal with import shortfalls through its Resource Adequacy Enhancements Initiative by requiring commitments from out-of-state generators and lining up dedicated transmission heading into the summer of 2021. (See CAISO Seeks ‘Firm’ Tx for Resource Adequacy.)

Mainzer’s First Conversation

“I unequivocally agree that we really need a candid and clear-eyed assessment of what happened in August so that we can identify the causal factors … [and] can craft solutions that affect the underlying issues,” Mainzer said during what he described as his “first conversation” as incoming head of CAISO. (See CAISO Names Bonneville Power Administrator as New CEO.)

Markets need to be based on firm resource adequacy frameworks, he said.

“This is clearly going to be topic No. 1 for the state … and others across the West,” said Mainzer, a California native. At the same time, “it’s absolutely axiomatic that we must meet California’s clean energy goals.”

State law (SB 100) requires LSEs to supply customers with only carbon-free energy by 2045.

Both Mainzer and Berberich stressed the need to continue reaching out to stakeholders across the West, especially as the EIM seeks to add a day-ahead market to its current interstate real-time operation. The governance of the EIM is especially important to those outside the state, who worry about CAISO exerting too much control, he said.

“We need to be humble and listening,” Berberich said. “That’s probably the most important learning we have from [the EIM],” which has achieved more than $1 billion of benefits for its members across the West, according to CAISO.

Berberich said Mainzer is a good listener and will continue the dialogue.

Mainzer said he had to work with multiple, diverse constituencies to incorporate wind into BPA, a hydroelectric powerhouse, and to allow the federal power marketing administration to join the EIM, which it’s scheduled to do in 2022. (See Customers Probe BPA on EIM Impact.)

“A guiding pillar of my philosophy will be a lot of outreach, a lot of listening and … just trying to harness the incredible intellectual capital of folks in our industry and trying to get those best solutions identified and right into the heart of operations,” Mainzer said.

He said his knowledge of the Northwest and California will serve him well.

It’s vital to “just really sit down and take the time to listen to folks [and] have that open, honest and rigorous dialogue,” he said. “People need to feel as though their perspectives are heard and understood. You’re not going to agree with everything everybody says, but at the end of the day, people need to feel that sense of participation and stakeholder engagement.”

Mainzer said he hoped to get back to face-to-face meetings if the threat of COVID-19 passes. Online meetings are a poor substitute, he said.

“Let’s go get that vaccine and get back to some three-dimensional relationships,” he said.

Chairman Prescott called Berberich and Mainzer pre-eminent energy leaders and said he expects Mainzer to do great things at CAISO. As for Berberich, he said he doesn’t think retirement will stick. “I just have a feeling we’re going to see your smiling face somewhere in the industry.”